2009-01-24

Market holiday (shutdown) coming

I'm sure we are going to get a market
holiday.

The regulators around the world have
already demonstrated that they are fully capable of doing wacky
things to the exchanges. If heavy selling continues, I expect that
eventually we will see a coordinated shut down of multiple
international exchanges at once.

You can pick all the excellent stocks
and good value you want, but I think the day is coming when
EVERYTHING BECOMES ILLIQUID because they will lock you & me out
of trading. In other words, whatever value you hold in securities
will become unavailable to you for some period of time... and then of
course you lose the ability to liquidate your assets, or sell out of
assets which are declining. Since "selling" is the
problem, just watch them outlaw selling.

You'll still have the assets, and
eventually they will become liquid again. This is why you have to
make sure that every security you buy has sound intrinsic value and
long term prospects. Also, this is why I think short term
speculative trading is a very bad idea, because eventually you will
get trapped holding some fundamentally worthless thing (e.g. the JPM
stock you want to buy for the bounce).

This idea has been suggested by government!

If you think I'm crazy, remember that
this idea has been already floated.

Oct. 10
(Bloomberg) -- Italian Prime Minister Silvio Berlusconi said
political leaders are discussing the idea of closing the world's
financial markets while they ``rewrite the rules of international
finance.''

``The idea
of suspending the markets for the time it takes to rewrite the rules
is being discussed,'' Berlusconi said today after a Cabinet meeting
in Naples, Italy. A solution to the financial crisis ``can't just be
for one country, or even just for Europe, but global.''